Connecting Strategy, Culture & Capabilities

Lawrence M. Miller, Institute for Leadership Excellence
A free video tutorial from Lawrence M. Miller, Institute for Leadership Excellence
Best Selling Instructor, Author & Leadership Coach
4.5 instructor rating • 16 courses • 106,385 students

Lecture description

The Conference Board in their survey of CEOs, has said that strategy execution is both the number one and number two problem they face. This course is designed to provide a specific set of actions to execute strategy by designing and deploying the capabilities and culture that will lead to strategic success.


This lecture lays out the basic premise of this course: External strategy, our position in the market, rates of growth and financial performance, are only achieved by effective Internal Strategy - the culture and capabilities - technical and social, that will enable us to achieve the external or business strategy.

Learn more from the full course

Business Strategy Execution: Agile Organization Design

Transforming Culture and Capabilities to Execute Business Strategy: The Agile Way to Business Strategy Success

11:08:05 of on-demand video • Updated March 2020

  • To create a process of agile action to achieve strategic business goals.
  • To align the internal technical systems (work process), social systems, and economic system to achieve business strategy.
  • To achieve agile adaptation and alignment of the organization's systems, structure, skills, style and symbols.
  • To engage the maximum number of leaders and associates in the process of building the future culture and capabilities that will lead to sustainable performance.
English [Auto] My friends my name is Larry Miller I will be your guide through this course and for the last about 40 years I have been helping corporations and other organizations governments to improve their performance and primarily improve their performance through their leadership skills. The leadership process and how they manage human performance or the culture of the organization. And one thing I've found and others have found is if there is a huge problem with executing strategy it's one thing to come up with a strategy of who we want to be where we want to go in the future. It's an entirely different thing to get there to make it happen it's sort of like you know it's easy to say I want to lose 20 pounds or five pounds or 100 pounds that's not hard to say. It's pretty easy to set that goal. But the process of making that goal actually happen executing the behavior the performance that's required to get to the goal. That's where we all tend to fall down. Well this course is about executing strategy. And by the time we're through you're going to have a plan for exactly how to execute your strategy and it's a plan that will work. I can guarantee you NOW I WANNA in this lecture. I want to give you a basic mental framework a very simple and basic mental framework to think about strategy and strategy execution in the next lecture. I want to talk about the problem and there is a problem with strategy execution and I want to explain why that problem exists and what we're going to do to overcome that problem. So first the idea that I'd like you to think about is that you can think about strategy in two types. First there is. Where do we want to go. Right. And you know think about that let's just say we were a restaurant you know and we could you know Chinese food. We were a Chinese restaurant and we're very successful we're making money and people love our food and everybody's happy it's all good. Right. And we say gee we can be more we can do something beyond what we're currently doing now. So let's have a strategy for expansion. And you could do one of two things you could say OK let's open a second third fourth fifth store around the city that we're in. That's one possible strategy or another possible strategy would be OK well we're were a Chinese food restaurant now. Let's open a French restaurant Indian restaurant a Mexican restaurant and a steakhouse because we're already doing Chinese food and we're sort of bored with Chinese food. So let's let's develop for other restaurants. Those four other types which are those two strategies do you think is most likely to work. And what's the problem with the second strategy. And the problem with the second strategy is that it requires different skills different capabilities. We know how to do Chinese food. Do we know how to do French food. Do we know how to do Indian food. Probably not. Now could we develop those capabilities and then introducing you to the word capabilities. Sure it's possible but there's a cost. Any time you have to develop radically different capabilities there is a cost to that development. Where to take our current menu of let's say Chinese food or Mexican food and develop four more restaurants like that. There would be lower cost and higher probability of success right. So when you develop a strategy you build on existing capabilities Bevo you inevitably stretch those capabilities or you have to develop some new and additional capabilities but not completely different capabilities right now two kinds of strategy. External and internal strategy. And this is where the problem begins to come to develop the external strategy of saying let's have five more restaurants or let's double our business whatever business you're in. It's fairly easy external strategy is about the marketplace. It's externally focused. In other words what are we going to do for our customers in the future for our marketplace what is our marketplace going to be. Who are our customers going to be how are we going to be positioned. Are we going to be a Red Roof Inn or a Ritz Carlton for example in the hotel space. They're both successful but completely different positioning in terms of how they are viewed in the marketplace and who their customers are right. That's positioning What are our products going to be that we're going to provide to our marketplace our customers or what services are we going to provide to our customers and how are we going to fulfill financial needs how are we going to meet the needs of shareholders or the needs of our owners. That is all externally facing strategy. Now in order to achieve any significant strategy you don't get there without the capabilities and the capabilities capability strategy and culture strategy are internal. You know somebody once said and I don't know whether this makes any sense or not but it's sort of a fun saying. Somebody once said culture eats strategy for breakfast meaning very simply that you can eyeball the strategy in the world but if your culture does not support that strategy you're not going to achieve that strategy. So you have to develop a culture. You have to change your culture whenever you have a strategy that implies a change in the business growing it or doing it differently or a different market. You have to change the culture to match to be aligned with your business strategies that make sense. So there's culture and there's capabilities capabilities meaning what are we able to do. And we have to align the internal and external. Very often they're not aligned and very often senior executive teams are great at coming up with that external Where do we want to go and who do we want to be in the future. And they may involve a small group of executives or external consultants in helping them come up with that and then present it to the organization and then the organization says gee you know that's great but how the heck are we going to get there. Right. So there's that misalignment. That's what this course is about. This course is about aligning internal strategy culture and capabilities to meet the needs of the external strategy because that's the only way you're going to get there. I hope that makes sense now when we think about internal strategy culture and capabilities. I'm going to just introduce you to two words that I'm going to use over and over again as we go through this course. Technical and social in every organization there are technical processes technical systems and the technical system if you just take a factory for example how has equipment laid out. What is the flow of work through that equipment. Who does what jobs how are those jobs defined. All those things are the technical system you know. This picture is a picture of a an airplane cockpit. Right. It's a good example of a technical system. And yes the technical system has to be well-designed the processes have to be well-designed to be capable of meeting our strategy. But the social system which is the culture who cares an important question who cares. Who knows who asked to act on what who decides about what how do people work together. We work as a team that we work alone who communicates what to whom. That's all social systems stuff it's all the people side of things. Now they're both important and they have to be aligned the technical and the social system have to be aligned. For example you redesigned the cockpit or the factory and the layout of equipment you have to retrain people you have to you have to make clear decisions about who's going to make what decisions. Who's going to be in control of what who's going to be responsible for what. What information are people going to get. All social systems stuff that supports the technical system. So alignment this way and then alignment that way that makes sense alignment between internal and external and then align them between social and technical systems. They're all good they're all important. And if we do that well we align those things. We have a unified strategy all pointing in the same direction and we will succeed in the execution of our strategy. That's the goal of this course. That's what we're going to do. Now the plan there are basically two major sections of the coarser stages of of course if you will which are broken down into subsections. Okay. And the big first half of the Course is about assessing where are we. And as we assess where we are we're thinking about what we have to do right out of assessing our strengths weaknesses threats and opportunities comes the idea about what we have to do to get where we want to go. So we're going to assess the culture we're going to assess leadership. We're going to assess the social technical system and out of that we'll come a plan to change to transform the culture. The second half of this Course is about transformation about actually executing the change that's required to achieve the business strategy. I hope that makes sense. So that's the curriculum that's the plan. Now let's go on to the next lecture and let's talk about why there is a problem and what is.